Page Nine

Friday, January 27, 2012

I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and frequently have clients come in for consultations who don't choose to file right away. Some have difficulty coming up with the fee, others have a hard time finding time to get their paystubs and documentation together or file late taxes, and still others are simply procrastinators.

However this can be very risky. If you are behind on a credit card payment, and the same bank that owns the credit card is who you bank with, the bank can instantly seize the overdue funds from your bank account. Other creditors must go through the judgment process, sue you in court and get a judgment against you before they can garnish you. Some people think they're safe for awhile; because after the judgment they expect the creditor to file garnishment paperwork next to get at their wages. But creditors can also get at your bank account. They can accomplish this very quickly, and usually take all but $300 out of your bank account.

Why put up with the constant phone calls from rude third-party collectors and endless streams of bills in the mail? Sometimes there is a good reason to put off filing, such as if your income was too high for awhile so you are not eligible to file yet. But most of the time there is no good reason to put off filing, it creates a headache that can compound your financial problems.